CFPB Will Issue A Report On Mandatory Arbitration

The Washington Post (3/3, Marte, 5.17M) reported that the Consumer Financial Protection Bureau “is expected to issue a major report next week on what consumer advocates say is one of the leading but most misunderstood ways that companies limit a customer’s rights, people familiar with the matter said.” The practice “is called ‘mandatory arbitration,’ which bars consumers from filing class action lawsuits or taking other steps to seek relief after they feel a company has wronged them.” The Post notes that such arbitration clauses “are often found in the fine print of credit cards, payday loans and auto loans.” Consumers “instead are steered into arbitration, which critics say is a secretive process that is often stacked in the company’s favor and leads to little benefit for consumers. ‘The unfairness here is incredibly widespread,’ says David Seligman, staff attorney at the National Consumer Law Center.” Consumer advocates say that most people”aren’t aware these agreements exist until after they feel they’ve been wronged and attempt to sue a company or seek some other form of retribution.”

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